When you invest in the market, you should pay attention to anything that may affect your stocks. Some events seem to come out of nowhere—perhaps a terrorist attack, a war, or a recession will cause havoc with the stock market. | PART FOUR UNCOMMON ADVICE Copyright 2004 by The McGraw-Hill Companies Inc. Click here for Terms of Use. This page intentionally left blank. CHAPTER What Makes Stocks Go Up or Down When you invest in the market you should pay attention to anything that may affect your stocks. Some events seem to come out of nowhere perhaps a terrorist attack a war or a recession will cause havoc with the stock market. If there is anything the markets hates it is uncertainty. One of the reasons the most recent bear market lasted so long was that no one knew when the recession would end whether we would win the war on terrorism and whether the United States was going to war. Any one of these events can send the market lower as investors seek protection in cash gold or real estate. As an investor or trader you must be aware of outside events. Sometimes it helps to step back and see the bigger economic picture. If you can anticipate how an event could affect the stock market you can shift your money into more profitable investments. Some pros believe that having a thorough understanding of the investment environment is more important than picking the right stock. 149 Copyright 2004 by The McGraw-Hill Companies Inc. Click here for Terms of .
